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Britain’s finance ministry said the two sides have agreed terms on a “Memorandum of Understanding” that will set the conditions for how regulators from the EU and Britain share information.
However, Brussels has said the MoU will not automatically lead to Britain’s large financial industry being able to sell a wide range of products and services to EU clients again.
Industry experts said while the framework was useful, it was unlikely to rekindle anything like the kind of access banks and brokers had to the EU before Britain left the bloc.
Brexit has already put a dent in Britain’s financial industry and a City of London official has described the framework as a “talking shop”.
“This is unlikely to offer solid foundations for bulk cross border business,” said Simon Morris, a financial services partner at law firm CMS.
In January, more than 6 billion euros in daily share trading left London for Amsterdam, along with swathes of trading in derivatives.
In a further potential blow to Britain’s financial services might, Brussels is now considering forcing the clearing of euro swaps, still dominated by the London Stock Exchange’s LCH arm in London, to move to the bloc.
Friday’s MoU agreement is similar to what the EU already has with the United States for arranging regular, informal and non-binding meetings of financial regulators to discuss new rules and air any disagreements.
So far, the EU has declined to grant any long-term direct access for financial firms from Britain, saying this week that it was in no rush....
more at Reuters
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Note: Press release from HM Treasury does not contain any detail.
Technical discussions on the text of the Memorandum of Understanding, which was agreed in a Joint Declaration on Financial Services Regulatory Cooperation alongside the Trade and Cooperation Agreement, have now been concluded.
The MoU, once signed, creates the framework for voluntary regulatory cooperation in financial services between the UK and the EU. The MoU will establish the Joint UK-EU Financial Regulatory Forum, which will serve as a platform to facilitate dialogue on financial services issues.